Corporate Profile

Ogden Martin : Trash and Burn

by Eric Weltman

UNTIL 1985, OGDEN CORPORATION was primarily a "smokestack operation" - it built ships and freight cars, manufactured machine tools and processed scrap metal. However, in 1985, Ogden sold these operations to its employees to concentrate on services. "The new Ogden," company ads proclaimed, is "putting America's house in order."

 Today, Ogden Corporation is a "service-oriented" company with 40,000 employees and net sales and service revenues in 1992 of over $1.76 billion. Based in New York City, its businesses include Ogden Building Services, which manages and maintains commercial buildings; Ogden Entertainment Services, which promotes concerts; and Ogden Aviation Services, which refuels planes and prepares on-flight meals. Ogden Environmental and Energy Services provides consultation to the nuclear industry and is involved in the cleanup of Defense and Energy Department contaminated sites.

More than half of Ogden's 1992 income, however, continued to derive from what most would regard a smokestack operation - incineration of municipal solid waste. Ogden Corporation owns 84.5 percent of Ogden Projects, Inc., based in Fairfield, New Jersey; Ogden Projects' Ogden Martin Systems operates 24 incinerators in the United States, representing 25 percent of U.S. incineration capacity. The company currently has four incinerators under construction in Maryland, New York, Florida and New Jersey. Ogden burns 8.8 million tons per year of U.S. waste - 28,135 tons per day - which is roughly 4.5 percent of the nation's solid waste. Since 1988, income from these operations has increased more than sixfold, to almost $70 million in 1992.

Ogden Martin has only been in the incineration business since 1983. Today it is one of the industry's leading players, if only because it is one of the few left. According to Ellen Connett, an editor of Waste Not, a watchdog newsletter that tracks the solid and hazardous waste industries, in 1985 about 60 incinerator vendors operated in the United States; now only about five remain. Indeed, part of Ogden's growth strategy has involved acquiring and operating existing incinerators. In January 1993, for example, Ogden completed acquisition of the U.S. incinerator business of Asea Brown Boveri, comprised of facilities in Honolulu, Hartford and Detroit.

 Ogden builds its facilities under municipality or city contracts with fixed operating fees. This arrangement has worked to shift responsibility for increases in construction or operating costs from the company to the municipalities, which are often forced to fund these increases by raising taxes and waste disposal fees. In addition, as an agent of municipalities, Ogden is partially insulated from criticism by environmental groups and other opponents.

Incinerators emit a wide array of toxic and carcinogenic chemicals including toxic heavy metals (such as lead, cadmium, mercury, chronium and arsenic), dangerous organic compounds (such as dioxins and PCBs), acid and acid-forming compounds (such as nitrogen oxides and sulfur dioxide), carbon monoxide and ozone-forming chemicals.

Dr. Richard Denison, a senior scientist with the Environmental Defense Fund, has determined that liquid leaching from incinerator ash (ash leachate) frequently contains four times as much mercury and three times as much lead as permissible under federal drinking water standards.

These threats to human health - along with incineration's economic costs and adverse impacts on recycling programs - have led to local opposition to incinerator siting in communities throughout the United States. Ogden Martin has chosen to meet that opposition with fierce aggression. The experiences of several U.S. communities in their dealings with Ogden highlight the company's methods. Ogden's tactics comprise a virtual source book on how to bully, manipulate and mislead communities into what Connett calls "the most expensive way to poison yourself."

 Paying for pollution

 Along with the environmental and health risks associated with incineration, taxpayers are forced to bear the considerable financial costs involved in building and operating Ogden facilities. The case of Lake County, Florida offers a dramatic example of the financial toll Ogden can exact from a community. The county's original 1984 incineration proposal called for General Electric (GE) to design, finance, build and operate a facility, at no cost to the community. By the time construction began in 1990, however, GE had pulled out of the deal, Ogden was the builder, operator and owner of the incinerator and construction costs had risen to $79 million. In addition, the county is paying the plant's property taxes.

County Commissioner Richard Swartz says, "We went straight from a situation where Lake County had no financial obligation - zero, none - to a situation where Lake County ended up paying not only for the $79 million in construction costs, but to a total obligation for debt service and operating costs of nearly $300 million over the 22-year life of the Ogden contract."

Like many communities that have negotiated with Ogden, Lake County locked itself into a "put-or-pay" contract, which forces the county to provide the incinerator with a required tonnage of garbage, or else be charged a penalty. The county is also responsible for disposal of the incinerator ash.

 Swartz says the Ogden contract has undermined the positive economic and environmental effects of the county's recycling program. "We're in the classic situation of having recycling compete with incineration. Even though Lake County is growing, our tonnages available for burning have been leveled or are going down. As a result, Lake County, through Ogden Martin, is importing tens of thousands of tons of medical waste, pharmaceuticals and plastics." Says Swartz, "In order to meet its contractual obligations to Ogden Martin, Lake County imported and burned waste from other Florida counties and lost money on the deal. Our county's estimated real costs were approximately $74 per ton, but we were receiving as little as $16 per ton. We made up the difference by charging Lake County residents higher fees."

 Swartz concludes that the county's decision to build an Ogden incinerator has not made long-term economic sense. "Certainly if Lake County had chosen to recycle and compost, then landfill the little that was left, we could have done it for significantly less than we pay now. No sane person looking at the numbers would doubt that." He adds that Lake County commissioners at one time considered not using the incinerator at all, because of its high operating costs. "The problem was that we didn't own the incinerator, so we couldn't just mothball it and pay it off. We were locked into a contract with Ogden Martin, and we were fairly certain that Ogden Martin would have sued us had we broken off the contract."

 Swartz advises other communities to seriously consider alternatives to incineration before entering into contracts with companies like Ogden. "I invite officials and citizens from other communities to talk to me about Lake County's experiences and to explore all of the alternatives before they lock themselves into incineration," he says. "I am willing to talk to any community and share the Lake County experience."

 Slap on the wrist

 Ogden's operating procedures in Indianapolis, Indiana offer another ominous example of what communities can expect from the company. Jeff Stant, executive director of the Hoosier Environmental Council (HEC), a citizens' group, says that the Indianapolis city council - which entered into a contract with Ogden in the late 1980s - is in no position to regulate the company for environmental violations. He says, "If you're like Ogden Martin, you realize, æThe city can't afford to admit it made a mistake, so we just won't run our scrubbers. The city isn't going to admit we're violating our limit. The city has a lot of political capital at stake.'"

 Stant asserts the City of Indianapolis finally initiated efforts against Ogden for environmental violations but only in order to prevent more far-reaching action by citizen groups. In what Stant describes as a slap on the wrist, the city struck a consent decree with Ogden in which the company agreed to pay $25,000 for failing the state's particulate emissions standards at two of its three incinerator units. In 1992, the U.S. Environmental Protection Agency (EPA) cited Ogden for 7,000 violations between 1989 and 1991. Stant says the EPA may have issued those citations as a means of prodding action at the state level. In January 1993, the state entered a consent decree in which Ogden agreed to pay $350,000 in fines, and the EPA dropped its actions. HEC contends that the fines only cover a fraction of the 7,000 EPA-cited violations.

Stant notes that entering into consent decrees with regulators has worked in the company's favor. "These consent decrees are a real problem because they generally levy light fines and contain language in which the company and the regulatory agency get to avoid or waive admissions of guilt," he points out. "Later on, it's difficult to enforce or invoke ægood character laws' that bar companies with records from public contracts because the companies say, æLook, we weren't convicted.'"

HEC also charges Ogden with poor maintenance at the Indianapolis facility. According to Stant, "Ogden was getting $8 to $10 million a year from the city to do maintenance." Yet, HEC contends, the company failed to clear scrubber tubes that were clogged, allowed boiler tubes to rupture, and failed to inspect and maintain the baghouse (a system used to gather particulates from the gases leaving the incinerator furnace). Despite these problems, the company continued to burn garbage, Stant says, in violation of its operating permit. Now, Ogden is "trying to bar us from looking at its maintenance plan, claiming it's a trade secret." Scott Mackin, president and chief operating officer of Ogden Martin Systems, told Multinational Monitor that the plan contains "detailed information about our internal staffing and operations procedures" that industry competitors would use.

Ogden barred certain HEC representatives, including technical consultants, from touring the incinerator in 1991. Wil Baca, an engineer from California who provides technical assistance to HEC, says, "As a general policy, they don't like anyone with expertise visiting their facilities - especially [people from] the other side." Ogden also prevented Baca from attending negotiations in which technical aspects of the consent decree were discussed by Ogden, HEC, the city, the state and attorneys from all sides. "They were vetoing who we could bring as our technical experts," Stant charges. He further notes that in March 1992, Ogden threatened to withdraw from negotiations if Stant testified regarding the company's Indianapolis plant in an adjudicatory hearing in Montgomery County, Maryland.

 Ogden vs. the public

 Ogden has threatened or pursued legal action against communities which resist the construction of company facilities or have attempted to limit or restrict incineration altogether. In Rhode Island, for example, Ogden is suing to oppose a state ban on incineration.

 In July 1992, Rhode Island, in which Ogden Martin had contracts to build two incinerators, voted to become the first U.S. state to ban municipal waste incineration. The day before the vote on legislation, Ogden Martin threatened the state with a $100 million lawsuit if the incinerators were not built. After the legislation passed, Ogden filed suit in federal court, seeking either to overturn the ban or be awarded more than $50 million in damages. Ogden argues that the ban constitutes an unconstitutional taking of its property and violates its contract with the state. William Harsch, a former director of the Rhode Island Department of Environmental Management, replies, "I strongly believe that the state's case is very winnable and that Ogden Martin does not have a winning claim on either ground - constitutional violation or contract damages." Terrence Tierney, special assistant to the Rhode Island Attorney General, adds, "The state believes that the ban on incineration is a valid exercise of its police power to protect the health, safety and welfare of the public."

 Harsch is representing the town of North Kingston, Rhode Island in another lawsuit involving Ogden. The town has filed a suit in state court, challenging the state Department of Environmental Management for issuing air permits for Ogden's proposed Quonset Point incinerator after the state legislature voted to implement the ban. "This permit is illegal, it is invalid and it should be canceled," says Harsch.

 Harsch describes the considerable intrigue surrounding the state case: "Until recently, North Kingston was represented by the firm of McGovern and Noel [which was] counseling the town to ... allow the incinerator to be built. The town council brought this deal before the citizens, who blew up and said, æno way!'. ... [Attorney] Gregory Benik ... moved to McGovern and Noel, then turned up as lead counsel for Ogden Martin. We filed a motion to disqualify him. The judge magistrate ruled that McGovern and Noel was in violation and ordered Ogden Martin to get new counsel. Ogden Martin has ignored this ruling and order." Harsch concludes, "What could be a more obvious conflict? As legal counsel to the town, McGovern and Noel had access to privileged information."

 Harsch is critical in general of Ogden's method of dealing with the community. "The Ogden style is æin-your-face.' ... It causes enormous strain for the town and the state," he says. "The bottom line is that the Quonset Point incinerator is unwanted by the town and the state at large. Ogden has chosen not to hear that very loud message."

 Ogden's interests are also at stake in Ontario, Canada where two lawsuits regarding provincial waste management legislation are underway. Mayor Bob Johnston of the Township of Georgina is bringing the first suit on the grounds that the Ontario government's July 1992 Waste Management Act (WMA) violates the civil rights of the citizens of York region by not allowing them to argue in favor of waste incineration or transport before the Environmental Assessment Board (the Act requires five regions in southern Ontario to provide landfill sites within their borders, specifically prohibiting or discouraging the transport of a region's waste to disposal facilities outside of that region).

Subsequent to the passage of the WMA, Ontario implemented a province-wide ban on new incinerators. Robert Charney of the Ontario attorney general's office says, "Even if Mr. Johnston were to win his case on the constitutional grounds, he would still be faced with the provincial ban on incineration, and the Ministry of the Environment is empowered by the Environmental Protection Act to implement that ban."

Johnston's suit has gone to trial; the judge is currently considering an attorney general appeal on a motion for summary judgement. The second suit, filed by the region of York in September 1992, is also challenging aspects of the WMA. This suit has not yet gone to trial.

In March 1993, Waste Not reported that Ogden Vice-President Jeffrey Hahn told Ontario activist David Mochrie that Ogden is suing Ontario. Mochrie says Hahn's statement to him was the first time citizens were told of Ogden Martin's role in these suits. Ian Blue, the representing attorney in both lawsuits, told Waste Not that Ogden is giving "technical assistance" to Mayor Johnston.

"Ogden is not a party to any legal action in the Province of Ontario," Ogden's Mackin told Multinational Monitor. "Ogden does, however, have a vital interest in assuring that all legal decisions affecting its interests are made on the basis of complete and accurate information. ... Ogden Martin's Executive Vice President, Jeffrey Hahn, therefore, responded affirmatively to a request by parties involved in a lawsuit against the interim waste disposal authority of the Province of Ontario to provide expert testimony on the health and environmental impact of waste-to-energy facilities and landfills."

 Citizens speak out

 Citizens in Lee County, Florida, Orillia, Ontario, Haverhill, Massachusetts and Montgomery County, Maryland, among others, all have similar tales to tell about Ogden. All can point to cases of the company's efforts to lock citizens out of the decision-making process.

"Incinerators pose as big a threat to democracy as they do to our environment," says Paul Connett. Don Slisher, a Lee County commissioner from 1984 to 1992 who opposed an Ogden incinerator, adds, "Never has so much time and energy been spent at the detriment of so many for the benefit of so few."



Defeating a Dangerous Plan

In 1990, Ogden approached Orillia, Ontario, a town of 24,000 residents, with a proposal to build an incinerator to burn 3,000 tons of trash per day. A group of Orillia's doctors researched published papers on the health effects of incineration, and in June 1990, released its own report rejecting incineration. The report - endorsed by 52 of Orillia's 54 doctors - along with a petition signed by 9,000 residents against the incinerator, played a role in convincing the city council to cancel the project.

Ogden charged that the physicians had "recklessly published baseless, libelous statements ... to defame Ogden Martin." The company threatened to file defamation suits if the report's signatories did not retract their endorsements. An Ogden vice president of marketing told The Orillia Packet and Times, "We're injured. You can't let a thing like that go on its course. It's too damaging." The result of the threat, however, was to encourage a 53rd doctor to endorse the report and the Ontario Medical Association to pass a resolution defending the doctors as physicians "who stick their necks out for the good of public health." Ogden never filed charges.

 Dr. Walter Ewing is associate medical officer of health in Simcoe, Ontario and one of the 53 doctors to endorse the report. He describes his concerns about siting the incinerator in his community: "I'm very disturbed by the potential contamination, with cadmium and other toxins, of the food my family and neighbors eat. My family eats fish from local lakes, and fruit from local farms. We drink milk from local cows. As a physician, I'd hate to tell a mother that she can't breast-feed her child. That would be devastating."

 Ewing says Ogden threatened him with legal action if he did not remove himself as a supporter of the report. "My reaction was to contact my lawyer because I'm committed to protection of health and the environment." He concludes, "I stand by our report. ... If anything, the data that is available now would make for stronger recommendations against incineration."n




Clean Community?

Environmental information and materials disseminated by Ogden may serve to misinform the public about the risks of incineration. A company public relations pamphlet, Ogden Martin Systems: Your Link to a Clean Community, says, "The high combustion temperature [in an incinerator] ... breaks down organic compounds, including dioxins." Paul Connett, editor of Waste Not and a professor of chemistry at New York's St. Lawrence University, counters, "It's true that under ideal conditions you can destroy or capture any dioxins that are in the waste stream. But Ogden fails to point out two things. First, conditions for destruction and capture are rarely ideal. Second, and this may be more important, dioxins are re-formed after the combustion chamber. Overall, when you look at the mass balance, more dioxins come out of an incinerator than go into the incinerator in the trash."

 Ogden Martin Systems President and Chief Operating Officer Scott Mackin replies, "The ideas that dioxin reformulates in the stack of a waste-to-energy facility is a theory that has been studied and disproved. Moreover, numerous tests conducted by independent third parties and state regulatory officials confirm that dioxin emissions from waste-to-energy facilities are not detectable."

 Environmentalists and even other incineration companies dispute Mackin's claim, however. "There is no question dioxin is detectable from incinerators," says Rick Hind of Greenpeace's toxics campaign. Hind says that Waste Technology Industries has admitted to dioxins emmissions at its Columbus, Ohio incinerator.

Your Link to a Clean Community also states that Ogden incinerators reduce burned waste 90-95 percent by volume. Yet Connett notes, "That's very deceptive. Ogden Martin says that as if [the company was] reducing the total waste stream by 90 to 95 percent, but it's not. First of all, a significant part of the waste stream doesn't burn well and goes straight to the landfill. Second, studies have demonstrated that in the real world, even burning everything they can, incinerators reduce the volume of the total waste stream by 60 to 70 percent, not 90 to 95 percent." Connett points out, "People must also keep in mind that in a raw waste landfill, the volume of waste is often reduced 60 percent through compaction. So, at enormous public financial cost and great risk to human health, incineration offers little or no advantage when it comes to volume reduction." Connett concludes, "The average person or public decision-maker reading Ogden Martin's statement could easily be misled."

 Despite its environmental claims, Ogden's adherence to the bottom line remains clear. The Connetts point to an Ogden incinerator in Stanislaus County, California where Ogden officials tested new mercury control technology, found that it was removing the mercury and then removed the controls. Says Connett, "It appears that they are only interested in using æstate-of-the-art' technology as a way to woo a few hundred million out of the next community. They seem to have little or no interest in making sure their old incinerators keep up with state-of-the-art technology."

 Mackin replies, "The tests were conducted at our Stanislaus County facility based on its selection as a test site by the EPA. No mercury concerns have been raised with respect to this facility's operations. Furthermore, Ogden Martin operates the Stanislaus County facility for public entities in the area. From a legal and regulatory perspective, a permanent change in the facility's air pollution control equipment would be subject to both client and regulatory approvals. The clients would also be responsible for the cost of this equipment."n